The health crisis, which has acquired a global character, has driven countries’ governments, regardless of their political orientation, to take measures to put a halt to companies closing and protect work sources and avoid the drop of incomes.
In March, the Brazilian government of Jair Bolsonaro approved, through Provisional Measure 927 (MP927), the implementation of a plan that enables, among other stipulations, companies to reduce salaries and working hours by between 25%, 50% and 70% for up to four months, or to apply to their workers a work suspension of 120 days in the context of the crisis caused by the coronavirus.
The set of measures taken by the Brazilian Ministry of Economy that will be effective while the Public State of Calamity lasts includes facilities given to companies so their employees can work from home, regardless of the existence of previous individual or collective agreements, by just notifying the employee in writing or by e-mail 48 hours beforehand. They have also been given the authorization to move legal holidays (vacation) forward with the same notification procedure applicable to home office cases, indicating the period, which must not be less than 5 calendar days, to be taken by the employee.
Regarding the stipulations for companies, the economic authorities have suspended administrative requirements in matters of work safety and health; it has suspended the possibility for the employer to request contributions for unemployment insurance FGTS (Fundo de Garantia do Tempo e Serviço) in March, April and May by giving payment facilities in installments and exempt of fines and interests.
Another measure was a special tax treatment for medical-hospital activities, such as the temporary exemption from Tax on Industrialized Products (IPI), which are indispensable for fighting Covid-19 and, until the end of the year, the reduction to zero of the import levy on medical inputs.
The government measures also included postponing federal taxes (Federal no Simples Nacional) for six months, reducing contributions to the Sistema S by 50% for 3 months, and facilitating procedures to renegotiate credits by incorporating documentation exemption (CDN).
Besides the measures directly affecting companies of the medical and hospital sector, there are other concrete stipulations for companies in general, such as the possibility to defer federal taxes (PIS, COFINS, IRPJ, and CSLL). For companies who chose to adhere to Simples Nacional, Resolution Nr. 152 of CGSN extends the term for payment of the Simples federal taxes only, this means, the resolution does not apply to ICMS nor ISS, whose extension depends on the rules of each State and Municipality.
In this scenario, companies such as Englobally Brasil e Compliance have played an important consultancy role. They have given valuable guidance to their customers regarding the dispositions the government established after issuing the Public State of Calamity.
“Customers affected immediately and in the medium term by the pandemic need special attention. We advise them in terms of interpreting the provisionary measures enacted by the government, dispositions which, in essence, intended, and still intend to prevent massive layoffs of employees by generating alternatives for employers to reach this purpose, not to fire their employees. All of this happens in the context of the advancement of a dangerous, unknown and unpredictable disease that has created a scenario that had never been experienced by today’s generation and has strong social and economic impacts for the nation”, says Roberto Oliveira, partner of Englobally Brasil e Compliance.
One of the emblematic cases had to do with a businessman who was forced to close all his stores (5) and had no liquidity to survive for a long time and had accounts receivable from sales on credit in payment receipts and credit cards. A difficult situation requiring timely and effective advice.
“Understanding the context of the health crisis, Englobally Brasil e Compliance created a plan to extend the survival of long-term labor contracts by using the effective provisionary measures and giving the businessman time to understand the new moment and take emergency commercial initiatives to sell his products differently, creating new invoices that could support the adopted commitments in the new scenario,” Oliveira explained. He adds that “today, 100 days later, the customer is recovering, his stores are returning to their natural state, with due reserve but with hope for better times and avoiding many layoffs and possible closing of the economic activity”.